Huntington, New York-based Catalyst Funds has converted the Stone Beach Special Opportunity hedge fund into a mutual fund.

“The Catalyst/Stone Beach Income Opportunity Fund’s hedge fund predecessor offered a proven strategy that we are proud to now bring to mutual fund investors,” said Jerry Szilagyi, CEO of Catalyst Funds, in a statement.

The new fund, Catalyst's third hedge fund conversion, will be managed by David Lysenko and Ed Smith and invest in mortgage-backed securities, commercial mortgage-backed securities and other related instruments. Investments may include pass-through and structured securities, such as fixed, floating and inverse floating rate collateralized mortgage obligations as well as interest-only and principal-only MBS. The fund employs an actively managed hedged strategy to limit declines in the net asset value of the portfolio in adverse market conditions.

Catalyst Funds currently offers 24 distinctive funds through a team of in-house portfolio managers and boutique institutional investment management partners.

From the current issue of

MODERN TRADER explores the effect of a potential trade war on U.S. equity markets. Will it end the bull run or will low interest rates allow U.S. equities to maintain its momentum? Read on. We also attempt to identify the key drivers of active equity hedge funds.